Spotless agrees to $720m PEP bid

Industrial services company Spotless has agreed to a full takeover by private equity firm Pacific Equity Partners (PEP) for a total cash consideration of $2.71 per share. The offer values Spotless at $720.2 million.

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Shares of Spotless rose as much as 13 cents, or 5.3 per cent, to $2.59 when they resumed trading this morning.

The total consideration also includes the interim dividend of five cents per share paid by Spotless to shareholders on April 12.

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''Following extensive discussions with PEP, in particular over the past week, and a detailed assessment of PEP's proposal, the Spotless board has determined that... the scheme is in the best interests of shareholders,'' Spotless said in a statement.

PEP initially offered $2.63 for each Spotless share, later sweetening the offer to $2.68.

The Spotless board had wanted $2.80 per share, saying that would adequately compensate shareholders for the company's significant investment for its medium-and long-term benefit.

Spotless said it had experienced significant disruption since PEP's initial proposal, on November 16, and it feared shareholder value could fall if the matter was not resolved. Plus, there were no proposals from any other party.

Spotless said the PEP proposal provided the most certain near-term return for shareholders, the majority of whom supported a scheme of arrangement at or above $2.68 per share.

Chairman Peter Smedley said the Spotless board was mindful of the impact the protracted process was having.

''Throughout the process... we have shared our intimate views of the progress and prospects of the business with all shareholders and we have been firm in our positive views,'' Mr Smedley said.

''We are also obliged to seek a resolution on reasonable terms if the interests of the business and shareholders were to be secured.''